Feed market update - 23 December 2015
Read our latest summary of developments on global markets for cereals and oilseeds.
On Tuesday, UK feed wheat futures prices (May-16) closed slightly up on the week, at £117.50/t. Currency was one of the main drivers of markets last week, with the US dollar strengthening against a large number of currencies. US grain futures generally ended the week lower, but the impact was tempered in euro and sterling terms. Defra’s final crop production and yield figures released last Thursday revealed an upward revision of over 250Kt in UK wheat production, compared with estimates made in October, while both barley and oat production were also revised up.
On Thursday, the new Argentinian government allowed its exchange rate to float, which in turn has seen the peso devalue by nearly 27%. This makes exports of grains and oilseeds more profitable for producers as they will receive more pesos for commodities traded in dollars. Subsequently, higher volumes of Argentine grains are expected to join the global market, putting more pressure on prices.
May-16 Chicago soyabean future prices closed up on the week on Tuesday and Paris rapeseed futures prices also increased. December UK rapemeal (34%, ex-mill, Erith) was unchanged at £139/t on Friday, compared to a week before. Brazilian soyameal (48% ex-store, Liverpool) increased by £1 on the week to £259/t. Hi-pro (ex-store, East Coast) soyameal was £249/t an increase of £2 Friday to Friday. US exporters announced over 760Kt of new soyabean sales last week, a welcome boost and, along with reports of dry weather impacting crop growth in northern Brazil, prices bounced. However, in light of the stronger competition from Argentina and with the US dollar strengthening, US soyabean futures closed lower at the beginning of this week.
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